Markets Monday Close: FTSE Slips to One-Week Low on Starmer Resignation; Sterling Holds, Gilts Rise
UK markets closed Monday lower as London’s domestically-focused FTSE slipped to a one-week low, weighed down by political uncertainty after Sir Keir Starmer announced his resignation. The FTSE 100 closed at 10,705, down 0.37%. Brent crude fell further to $86.10 a barrel on the Iran-talks “encouraging progress” conclusion. Sterling held up reasonably at $1.3460 despite the resignation. UK 10-year gilt yields rose to 4.85% on bond-market caution over Burnham-era state-borrowing implications. Bank of America keeps the August Bank Rate cut probability above 40%.
The market response is a structural split: equity-side political-uncertainty pricing dragged FTSE lower; commodity-side Iran-progress positioning kept Brent on the downward trajectory; FX-side Burnham-Reeves continuity signal held sterling stable. The political-mathematical implication for Chancellor Rachel Reeves: the gilt-market rise reflects bond-market caution about Burnham-era fiscal positioning, even with the Streeting cabinet-bargain framing operationally confirmed. The Brent below $87 sits below the operative Ofgem October price-cap band lower bound.